error: unable to create file Scripts/Company Directory/Designation/Validate delete designation when designation is assigned to any user/Script1517401711796.groovy: Filename too long
I suppose your Katalon project is located in a folder of which absolute path name is longer than 121 characters.
"Scripts/Company Directory/Designation/Validate delete designation when designation is assigned to any user/Script1517401711796.groovy" has 134 characters.
Therefore the absolute path of your test case file could be longer than 255 characters.
You may or may not know, due to a historical reason, Windows OS has a limitation that ANY file path can not be longer than 255 characters, as default (though configurable for Windows 10). See the following article.
So, in order to workaround the error you can
move your Katalon project into a folder of which absolute path is much shorter. For example,
Read the above mentioned article, and setup Windows 10 so that it accepts long file names.
Managing long file paths has never been easier thanks to the long path tool program’s user-friendly interface.